Monday, January 31, 2011

(Crain's) — Long-suffering local retail landlords got a double dose of good news in the fourth quarter, as rents edged up and the vacancy rate fell as retail chains led by fast-food restaurants, discounters and grocers began ramping up their post-recession expansion efforts.

The vacancy rate fell for a third straight quarter, to 10.8%, after peaking in the first quarter of last year at 12.1%, according to a new report by CB Richard Ellis Inc.

Local asking rents, meanwhile, climbed in the fourth quarter to $15.30 from $14.83 in the third quarter — the first time Chicago-area retail rents fell below $15 in more than a decade, according to CB data.

“The average net asking rates are still much lower than they have been historically, but what this quarter-to-quarter increase shows us is a positive sign in terms of getting a little better traction in the market,” says Tim Brauer, a managing director with CB Richard Ellis who heads the local retail brokerage and land services groups. “We're on the right side of this.”

Mr. Brauer, who is transferring to CB's Bannockburn office from the west suburban Oak Brook office, says the big story of 2010 was discounters and food stores starting to refill some of the vacancies created when the recession claimed big chains such as Circuit City and Linens ‘n Things. Since retail development has all but halted, the market is moving toward equilibrium, and Mr. Brauer expects that trend to continue in 2011.Some national statistics seem to portend good things for the retail market. On Friday, the Commerce Department reported that the nation's gross domestic product grew at an annual rate of 3.2% in the fourth quarter, up from 2.6% in the third quarter. Consumer spending fueled much of the gain, growing at an annual rate of 4.4%, the fastest pace in nearly five years.

“We're at a point where we're seeing improvement. How quickly that comes will be hard to say,” Mr. Brauer says. “I think there will still be some continued shakeup in the retail market.”So far, the retail market's recovery has been uneven, with some chains growing while others are shrinking, a trend that's been playing out downtown in recent weeks.Discount home furnishings chain HomeGoods, a unit of Marshalls and TJ Maxx parent TJX Cos., leased a 25,503-suare-foot space on the third floor of 600 N. Michigan Ave., snapping up the biggest vacancy on Chicago's Magnificent Mile.

On the street level of the Mag Mile, upscale watch retailer Tourneau LLC leased a 1,668-square-foot space just north at 636 N. Michgan Ave., with plans for a new Rolex store. Just a block south, shoemaker Kenneth Cole recently closed its store at 540 N. Michigan Ave., just about two years after subleasing about half of its space to another retailer.

Meanwhile, well-known women's fashion discounter Loehmann's on Saturday shuttered its local flagship store at 151 N. State St. The New York-based retailer, which is operating under Bankruptcy Court protection, says the two-level, 27,000-square-foot store was among six “underperforming” locations being shut down.Fashion, evidently, is less in vogue than eating these days.

Grocery chains such as Aldi continue to expand, while Meijer Inc. has a deal in west suburban Berwyn for what would be its fourth new small-format store, largely focused on selling groceries rather than general merchandise like traditional Meijer stores.

Restaurants, particularly so-called fast-casual chains, also are becoming increasingly active. Five Guys Burgers & Fries, for instance, recently signed a 10-year lease for a new store in Hyde Park at 1454 E. 53rd St., a University of Chicago-owned property.

“In the fourth quarter of 2010, we really did see a pickup in the interest,” says Kelsey Blindt, an associate with HSA Commercial Real Estate, which represented the university in the lease.

Ms. Blindt says national chains like Five Guys have been scoping out the market the past couple years even as relatively few deals were inked. Now, she says, those chains are ready to strike and many landlords are generally willing to sign deals even at today's low rents.

“I think 2011 is the year for deals,” she says. “A lot of retailers are kind of realizing that now is the time to catch good values.”

Significant leases in the fourth quarter included:

Grand Rapids, Mich.-based Meijer signed a lease for 93,000 square feet at Cermak Plaza in Berwyn at 7175 W. Cermak Road. The new location, to be constructed on the site of a long-vacant Service Merchandise store, is expected to be open next year, according to Berwyn officials.

Gordmans also signed a lease for 50,000 square feet in a 191,684-square-foot shopping center at 2639 Aurora Ave., Naperville, taking space formerly occupied by Cub Foods. The center, which also includes a Macy's clearance furniture outlet, is owned by Australian mall owner Centro Properties Group.

Dick Barr of Goldtree Realty is a licensed Broker and has been an REO/Foreclosure specialist in the Chicagoland area since 2004. In addition to specializing in foreclosures throughout the Chicagoland area, Dick has also purchased for investor clients properties all over the midwest, in cities such as Milwaukee, WI; South Bend, IN; Cincinnati, OH; Indianapolis, IN; Memphis, TN; Kansas City, MO and others.

If you would like more information about the foreclosure buying process, you may contact Dick at his office in Skokie, IL at 847-674-4445. You can also visit him on the web at www.ForecloseChicago.com, or you can email him at DickBarr@ForecloseChicago.com. Dick has a team of agents who are ready, willing and able to help you with your home buying or real estate investment needs.

Saturday, January 29, 2011

Northwestern University in the middle of Evanston housing controversy.

4,000 + Evanston students have signed a petition against the city's discriminatory law restricting all Evanston housing to no more than 3 unrelated persons. A clear blow against the student body, who relies on shared housing for affordable, close to campus housing.

The petition, a revolt against the city's comments in November of 2010 that it plan to plans to increase scrutiny of overcrowded and illegally altered rental housing.

The students argue that the law would force them into housing further off campus, resulting in unsafe conditions for those students affected. Also, the law is a discriminatory law that has nothing to do with safety. The law does not take into account the size of the units in question. Technically, under the law, a 5 bedroom house is not suitable for 4 unrelated residents, however that same 5 bedroom house IS suitable for 8 related residents. It is clearly an attack towards the students, and drastically affects the value of the residences in question.

If a property owner owns a 5 bedroom residence, he shall NOT be able to make use of the room for it's best practical use according to the city, thereby lowering the overall value of his own property. Therefore, in addition to being an attack against students, this is also an indirect attack to ALL Evanston property owners. The resulting decreases in value will affect every Evanston property owner.

I applaud the students' efforts to keep the city from putting the students and property owners in harms way, and I will stand beside them in their fight.

Dick Barr of Goldtree Realty is a licensed Broker and has been an REO/Foreclosure specialist in the Chicagoland area since 2004 as well as a member of the North Shore - Barrington Government and Political Issues Committee. In addition to specializing in foreclosures throughout the Chicagoland area, Dick has also purchased for investor clients properties all over the midwest, in cities such as Milwaukee, WI; South Bend, IN; Cincinnati, OH; Indianapolis, IN; Memphis, TN; Kansas City, MO and others.

If you would like more information about the foreclosure buying process, you may contact Dick at his office in Skokie, IL at 847-674-4445. You can also visit him on the web at www.ForecloseChicago.com, or you can email him at DickBarr@ForecloseChicago.com. Dick has a team of agents who are ready, willing and able to help you with your home buying or real estate investment needs.

Thursday, January 27, 2011

Gotta Love It! Chicago # 1 in political corruption and # 2 in home repossessions.

Lenders took back 45,555 properties here in 2010, a 20% increase from 2009, according to a report released Thursday by RealtyTrac Inc., an online listing service for distressed real estate. Only the Phoenix area had more repossessions, with 55,372. Detroit ranked third, followed by Miami and Atlanta.
Lenders filed 138,913 foreclosure-related notices last year on Chicago-area properties, a 16.1% increase from 2009 and more than three times the number of filings in 2006.
Nationally, filings rose 1.7% from 2009 in the 206 metro areas with populations of 200,000 or more, RealtyTrac said.

One out of every 27 properties in the Chicago area received a foreclosure notice in 2010, the 35th-highest rate among the 206 metro areas. Nationally, one out of every 45 properties received a foreclosure filing.
High unemployment and falling real estate prices have fueled the rise in foreclosure filings, and experts expect rates to jump even higher in 2011 in part because of the controversy last fall over the alleged mishandling of foreclosure documents. Many lenders and loan servicers delayed new cases while they examined their procedures, pushing many suits into this year.

“I would expect the first part of 2011 to be higher than anticipated,” says Geoff Smith, a senior vice-president at Woodstock Institute, a Chicago-based advocacy group. “I think the numbers (in 2010) would have been higher.”

Foreclosure-related filings rose last year in 149 of the 206 metro areas RealtyTrac monitors. Las Vegas still leads the nation with the highest foreclosure rate; one out of every nine properties in the area received a foreclosure notice in 2010.

Dick Barr of Goldtree Realty is a licensed Broker and has been an REO/Foreclosure specialist in the Chicagoland area since 2004. In addition to specializing in foreclosures throughout the Chicagoland area, Dick has also purchased for investor clients properties all over the midwest, in cities such as Milwaukee, WI; South Bend, IN; Cincinnati, OH; Indianapolis, IN; Memphis, TN; Kansas City, MO and others.

If you would like more information about the foreclosure buying process, you may contact Dick at his office in Skokie, IL at 847-674-4445. You can also visit him on the web at www.ForecloseChicago.com, or you can email him at DickBarr@ForecloseChicago.com. Dick has a team of agents who are ready, willing and able to help you with your home buying or real estate investment needs.

Tuesday, January 25, 2011

Dick Barr of Goldtree Realty is a licensed Broker and has been an REO/Foreclosure specialist in the Chicagoland area since 2004. In addition to specializing in foreclosures throughout the Chicagoland area, Dick has also purchased for investor clients properties all over the midwest, in cities such as Milwaukee, WI; South Bend, IN; Cincinnati, OH; Indianapolis, IN; Memphis, TN; Kansas City, MO and others. Dick says the following tips apply to virtually all markets in the U.S. and that while many buyers have heard that there are many foreclosures on the market, most don't understand these practical rules they can follow to get the right property at the right price.

Here are some tips to consider:

1. Work with an agent who has access to foreclosure information.
Many home buyers assume that all agents have access to foreclosure listings. While most agents do have access to the information, a regular, retail agent may not know the players, the processes, the tricks to get your offer accepted by the banks.

2. Bank-owned properties generally close faster than short sales.
While short sales can be bargains, they also can take a lot longer. Some banks will negotiate in a timely manner on short sales, but most will prioritize properties they have already repossessed. It is not uncommon for a short sale to take anywhere from 3 months to 2 years to get approval from a bank. At which time a buyer's circumstances most definitely could have changed drastically from the time they initially placed their offer on the house.

3. Don't automatically assume you can offer less than full asking price.
This tip varies from market to market, however in the hot foreclosure markets, such as Chicago, banks price their properties to attract the most attention. They want to initiate a bidding war. Many foreclosure properties are priced below market value with the hopes that a large amount of buyers will throw up offers, leading to, in most cases, a selling price way above asking price.

4. Do not count on the fact that the bank will counter your offer.
Almost all foreclosures that are priced right turn into "Multiple Offer" situations. When this happens, the banks do not make counter offers, they simply ask for your highest and best offers. By not offering a price worthy of a banks immediate acceptance, you allow more time to pass, giving opportunity to other buyers to compete with you. Low balling a bank could end up costing you thousands of dollars.

5. Get pre-approved from the right bank.
When making an offer on any property, it's strategically helpful to be pre-approved by the right bank. Banks, such as Fannie Mae (FNMA) offer their own financing for home owners and investors. Often, offers that include an opportunity for them to finance the deal can be more attractive than an outside bank loan or approval. During negotiations, this may tip the scales in your favor.

If you would like more information about the foreclosure buying process, you may contact Dick at his office in Skokie, IL at 847-674-4445. You can also visit him on the web at www.ForecloseChicago.com, or you can email him at DickBarr@ForecloseChicago.com. Dick has a team of agents who are ready, willing and able to help you with your home buying or real estate investment needs.

Thursday, December 2, 2010

As if the lives of Realtors hasn't been bad enough since 2008, The Federal and State Governments have added yet another obstacle to conducting business.

Anyone who is or knows a Realtor, knows that being one is one of the hardest jobs to effectively squeak a long term career out of. Realtors do not get paid for their work, they do not get paid for the advertising they do, they do not get paid for starting early, working late, or working weekends. Realtors get paid when and ONLY when they successfully bring upon a full sale on a house that they are involved in either buying or selling.

A Realtors market is volatile, unsecure, highly competitive and at times unsafe. In 2008, as the sun was rising on this most recent downturn in the economy, the Realtor business saw one of the hardest times in history fall upon them. Realtors spent the next 18 months spending thousands of hours working with buyers and sellers on deals that were never consummated. Listing brokers spent thousands on ads and marketing homes that would never sell. Agents with 6, maybe 12 months of reserves in their bank accounts found themselves with NOTHING to their name.